The devil you know is better than the devil you don’t. This mantra describes how people prefer options with fewer unknowns and avoid options with less information, AKA Ambiguity Aversion.
Ambiguity Aversion discourages people from taking action on something with unknown outcomes. When people don’t know much about an option, they are going to avoid that choice for something safe and known to them. However, just as we select the “safe” option, we might risk missing out on something great.
When there is a great level of uncertainty, this innate cognitive bias leads us to only focus on the possible negative outcomes of selecting the uncertain option, so that we feel we have to select the familiar choice.
Consider a patient with brain cancer who has to make a treatment decision with her doctor. The first option is radiation therapy. This is a more traditional treatment with plenty of data available. Although outcomes are never certain, the patient can establish some expectations based on her age, general health, and tumor type and location. The doctor gives her approximately a 50% success rate of halting the growth and spread of the tumor.
The second option is an experimental surgery she qualifies for. There is no reliable data on this treatment yet, but the doctor says that the surgery could potentially eliminate the tumor completely. However, he is unable to provide a reliable probability of success and unforeseen complications she might experience during or after the surgery. In this case, although the patient has the potentially high benefit of eliminating brain cancer with surgery, the high degree of uncertainty leads the patient to choose the radiation treatment instead.
Undeniably, this is a complex and heavy example so a simple heuristic hack won’t do here. Instead, it would be most helpful and compassionate if the doctor and patient had an open conversation about the risks and benefits. Perhaps the patient can talk to others going through the experimental surgery or speak to a number of experts in the field of brain cancer treatment. She will never be able to eliminate the unknowns, but armed with more information she can feel more prepared to make this difficult decision based on logic and not fear of unknowns.
The Medicare Advantage category is extremely complicated and confusing for seniors. When most seniors become eligible, if they just go on the government-provided plan, it becomes very difficult to get them to switch from the government-provided plan to a Medicare Advantage plan. Often, they have a government Medicare plan and likely one or more supplementary plans. So now they are dealing with multiple insurance plans, the government, and often spending more money, but still not receiving all the benefits they would have liked. If they had simply switched to a Medicare Advantage plan, most of them would have saved money and gotten better coverage. However, especially with seniors, this is a very difficult behavior to change!
Over the past 10 years, Medicare Advantage Plans have marketed themselves aggressively to reduce the perceived unknowns and uncertainties of switching from Medicare Part D to Medicare Advantage. In fact, today more people start on a Medicare Advantage Plan when they first enroll, thereby eliminating the need for a switch later.
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Newristics
11 November 2022
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